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"What Happens If You Do Not Have A Last Will And Testament"
Section 6: "What Happens If You Do Not Have A Last Will And Testament"
1. Division Of Property:
If you die without a Will, your state's laws say who will receive your property. To know exactly what will happen to your property if you die without a Will, you need to talk to a lawyer licensed to practice in your state. Because laws vary from state to state and different laws apply to different situations, it is impossible to say what will happen in your individual case. Your state's laws may say that your property is to be given to both your spouse (your husband or wife) and your children, or your state's laws may separate real estate (real property) from personal property, and give your spouse all of the real estate, and then divide the personal property between your spouse and children.
2. Custody Of Your Children:
If you have minor children when you die, your spouse (the surviving parent) will have custody of your children. But, if there is not a surviving parent and you do not have a Will, your state's laws will say who will take care of your minor children and your minor children's property.
Each state has a Court that deals with whom will have custody of your minor children if you die and who will take care of property which may be left to your minor children. The name of this Court will vary from state to state. The Court is obligated to do what the Court believes is in the best interest of your minor children. In most cases, the Court will name or appoint a family member. However, the Court may appoint someone who is not a family member or who is a complete stranger to you and your children.
3. Potential Problems:
a. Obviously, since state law says who will receive your property if you do not have a Will, there may be unintended consequences. One of the saddest cases that I have seen involved a man I will call Bill. Bill had bought a small home and paid for it completely by himself. Sometime after the home was paid for, Bill married Bonnie who had a child. Bonnie's child was an adult and never lived with Bill and Bonnie. Bill wanted to do what he thought was right and conveyed to Bonnie a one half interest in the home that he had paid for. Later, tragically, Bonnie died. She did not have a Will. Under our state laws, Bonnie's one half interest was divided between her husband, Bill, and her child. The result was that Bill owned the major interest in the home, but his deceased wife's (Bonnie's) adult child also owned an interest in the home. Tragically Bonnie's child wanted to be paid for the child's interest in the home. Bill did not have the money. The child filed a legal action asking that the home be sold. Sadly, the home was sold and the child received part of the money that reflected the child's interest in the home. Bill received the majority of the money from the sale, but he lost his home, a home that he had already paid for.
b. Another potential problem occurs when property passes to a minor. Normally, if you have a Will and have named a Trustee for your minor child(ren), the Trustee has the power and authority to take care of matters. If, however, you do not have a Will or your Will does not have a Trust for minor children, and property passes to a minor child, there could be problems which require Court action.
(i). PERSONAL PROPERTY AND/OR MONEY. As stated above, a minor child cannot hold property or take care of property. Therefore, with or without a Will, if personal property or money goes to your minor child, someone will have to hold and take care of your minor child's personal property or money. The person will either be the Trustee named in your Will or someone appointed by a Court if you do not have a Will or your Will does not have a Trust for minor children. Without a Trust stated in your Will and depending on the amount of personal property or money that your minor child receives, the person taking care of your child's property or money may have to report yearly to the Court on how your minor child's personal property or money has been handled. The person may have to get Court permission to use your minor child's personal property or to spend your minor child's money, even though the personal property or money is being used for your minor child's benefit. The requirement of reporting to the Court on how your minor child's property is handled is for your child's protection.
(ii). REAL PROPERTY. If your minor child has received an interest in real estate and you need to either sell or mortgage the property (for example to fix up or repair your home or to pay bills), you will need to hire a lawyer and get Court approval. Buyers want to buy the whole property and banks require that they have a mortgage on the entire real estate. Buyers will not buy and banks will not take a mortgage on just the portion that you own. Therefore, you must get Court permission to sell or mortgage your minor child's interest.
In another sad case, a gentleman died without a Will. His one half interest in the home passed both to his wife, I will call her Wanda, and his Son, I will call his Sonny, a minor child. The home needed a new roof and other repairs. Without the repairs, the home would be ruined. Wanda did not have enough money to pay for the repairs herself and decided to borrow money using the home as collateral. Wanda could sign a mortgage, but since Sonny was a minor he could not sign a mortgage. Wanda had to hire a lawyer and file a legal action asking for the Court's permission and direction that Sonny's interest also be mortgaged. If the loan was not approved, the repairs would not be done, and the home would be ruined. Fortunately, the Court approved the loan and mortgage. But it cost Wanda time and money.
Again, this requirement of Court approval to either sell or mortgage a minor's interest in real estate is for your minor child's protection.
This ebook is for general information only and may not be applicable to your situation. Talk with a lawyer licensed in your state.
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